New research from the University of Nevada at Las Vegas, Washington University in St. Louis, and Case Western Reserve University uses simulated models to estimate the impact of COVID-19 on evictions, rental arrears, overcrowding, and homelessness. These models estimate that the federal eviction moratorium reduced evictions by 51% before it expired in mid-2021, although rental arrears, overcrowding, and homelessness remained high. Based on the simulations, the authors find that the U.S. Department of the Treasury’s (Treasury) Emergency Rental Assistance (ERA) program also contributed to lower evictions but had a limited effect on housing insecurity and homelessness due to the initially slow roll-out of funds. Ultimately, the failure to address underlying financial hardship and limited affordable housing hampered the economic recovery in the wake of the COVID-19 pandemic.
To evaluate the impacts of the federal eviction moratorium and ERA, researchers simulated the number of evictions and the amount of rental arrears among low-income renters (those with incomes below 130% of the Federal Poverty Level) between January 2020 and February 2022 under four scenarios: (1) no COVID-19; (2) COVID-19 with no policy intervention; (3) COVID-19 with an eviction moratorium; and (4) COVID-19 with the federal eviction moratorium and ERA.
Based on these simulations, the authors estimate that COVID-19 severely impedes low-income households’ ability to afford housing without any policy intervention. Researchers determined that evictions would increase 25% over pre-pandemic levels – reaching more than 1.5 million excess evictions – absent policy intervention. Researchers also projected that tenants would accumulate $20.4 billion in unpaid rent over 36 months, which could increase crowding by 45% and homelessness by 120%.
The researchers estimated that the federal eviction moratorium reduced total evictions by 51% compared to a hypothetical situation involving no intervention. Without federal investment, the authors estimated that rental arrears would remain near $20 billion and over-crowding and homelessness would not improve for the most vulnerable tenants.
Based on the disbursal rate of ERA through February 2022, the authors estimate that arrears, crowding, and homelessness would remain high although lower than simulations with no federal interventions. This is at least partially due to complicated eligibility criteria for tenants and landlords that delayed the distribution of funds. An alternative simulation finds that if ERA funds were initially disbursed more rapidly, homelessness, arrears, and overcrowding would have fallen quickly, with rental arrears and evictions falling below no-COVID levels. The researchers estimate that while funds run out sooner under this scenario, each dollar of assistance would stabilize cost-burdened households at risk of homelessness more efficiently.
In order to improve outcomes, the researchers recommend policies that slow eviction processing and hasten disbursement of ERA funds. They observe that future policy should consider the complex feedback mechanisms in tenant-landlord decision-making. Low-income tenants facing financial stress must make tradeoffs about which bills to pay, often resulting in the accumulation of arrears. As financial instability continues, tenants are faced with the decision to accumulate more arrears or find alternative housing through doubling up or renting a cheaper apartment. On the other hand, many “mom-and-pop” landlords rely on income from rent payments to afford their mortgages. These financial pressures can drive landlords to seek evictions. The authors note that if policies were to slow the eviction process, landlords may be less incentivized to pursue evictions. For tenants, easily accessible rental assistance programs could help ease the complex tradeoffs in household budgeting when households experience a financial shock. By considering these complex tenant-landlord feedback mechanisms, policymakers can better address housing insecurity and homelessness.